OAR 274-045-0060: Terms of Loan

(1) The maximum amount allowed for a loan may not exceed the least of: (a) The maximum original principal balance permitted on a single-family first mortgage loan by the Federal Housing Finance Agency. (b) The maximum loan-to-value ratio or combined loan-to-value ratio permitted by the United States Department of Veterans’ Affairs for its Home Loan Guaranty Program (38 U.S.C 3701 et seq.; 38 C.F.R part 36). (2) When calculating the maximum amount allowed for a loan, the Department of Veterans’ Affairs shall exclude: (a) Funds disbursed under ORS 407.145 (2) and 407.275 (4); and (b) The amount of a loan that has been repaid, or for which the property securing the loan has been transferred by deed or otherwise, if the property is destroyed by fire of other natural hazard; or is taken through condemnation of lost or disposed of for a compelling reason devoid of fault on part of the applicant. (3) An eligible person may not receive or, under ORS 407.305, assume more than four loans. The borrower shall not receive any cash back from the ODVA loan. (4) The Director shall determine the period and amount of repayment based on the age, condition, location, and useful life of the security, but the maximum period of repayment shall not exceed statutory limits. (a) Loans shall be made in multiples of one dollar ($1.00). (b) Each program loan shall have a final maturity of at least 15 and not more than 40 years from the date of purchase. (c) A loan may be amortized over a period of not more than 40 years for a home other than a manufactured home. A loan for a manufactured home may be amortized over a period not exceeding the expected life of the manufactured home, as determined by the Department of Veterans’ Affairs. The limitations do not preclude the department from later extending the amortization period. (5) The borrower shall timely pay all property taxes and other assessments that may or do become a lien against the loan security. (6) The borrower shall carry hazard insurance on the security. The Director may also require that hazards other than fire be covered. All premiums and charges for said coverage shall be timely paid by the borrower, and (a) The Director may determine the form and amount of insurance coverage; (b) All insurance claims money shall be payable to ODVA under a provision in the mortgage or trust deed; (c) In the event of failure to maintain coverage, the Director may acquire the necessary coverage and collect amounts due in a manner consistent with the mortgage or trust deed documents; and (d) In case of loss, the Director shall determine the disposition of any and all funds received under claims submitted under the insurance policies. (7) The Director may collect in advance, unless otherwise agreed, from said borrowers together with their payments required under section (3) of this rule, sufficient amounts to pay property taxes, hazard insurance premiums, and other charges related to the security. Such additional amounts collected by the Director shall be held in escrow pending payment of the obligations for which they are collected and interest on said amounts shall be paid to the borrower in the manner and at the rate of interest described in ORS 87.245(1). (8) The Director may pay property taxes, hazard insurance premiums and other charges from funds collected from the borrower for those purposes. The Director, in the absence of funds collected from the borrower (or if such funds are insufficient in amount), may elect to pay property taxes, hazard insurance premiums, and other charges. Any amount paid by the Director may be collected in the manner consistent with the security documents or other manner agreeable to the Director and borrower. The Director will not add amounts advanced for payment of property taxes or hazard insurance premiums to the principal balance of the loan. On these loans, any amount advanced will be entered as a negative balance in the escrow account. (9) The borrower's loan payment may be increased to repay the money advanced to pay the property taxes, hazard insurance premiums, and other charges against the security, together with interest thereon, within a maximum period of 12 months or such shorter time as established by the Director. (10) No borrower is entitled to borrow more than the maximum amount allowed under ORS 407.215 other than for reasons specified in ORS 407.205 except that when the property on which the loan was made becomes the property of the applicant’s spouse as a result of a judgment declaring a marriage void or dissolved and the loan is repaid, the loan may be excluded from consideration in computing the maximum loan allowable under ORS 407.205.